Spotlight on Localisation of Sports Betting at 2023 SBWA Conference

Despite the allure of Nigeria’s booming sports betting sector, boasting a market net worth exceeding $2 billion and steadily growing, the reality for operators is anything but optimal, Iyke Bede

Over the years, there has been an influx of operators into the Nigerian market, all seeking to grab a slice of the market share driven by over 60 million punters. While a handful of these operators have managed to secure a position leveraging either retail or online gaming channels, a majority of them have gone out of existence. Their disappearance has been mostly attributed to their inability to pay punters’ winnings or failing to meet regulatory requirements set by either state or national regulators.

Aside from Nigeria, this scenario is prevalent in other parts of West Africa, a geographical area home to about 441 million people (United Nation’s August estimates), and is expected to reach 462 million by 2025. This population growth implies a growth in market size, but one that sadly may suffer from existing issues such as multiple taxation and licensing fees and lack of local content and infrastructure.

To address some of the issues, regulators, operators, and stakeholders from across the globe converged for the 2023 edition of Sports Betting West Africa SBWA, an annual gaming conference recently held at the Federal Palace Hotels and Casinos, Lagos.

Analysing the role internet penetration —which currently stands at 55.4 per cent in Nigeria — plays in driving sales online, BETANO head of retail operations, Ahmed Olawale, argued that retail marketing remains investors’ best bet. In his paper presentation, he elaborated that less than 50 per cent of the 60 million punters have limited access to the internet. He further stated that over 60 per cent of revenue was generated via the retail channels that offered a fuller experience of the sports betting ecosystem, especially to those in the informal sector.

“The reason we have a low virtual contribution in the online space is because of the data consumption and the user experience. You can’t have the live user experience you have in the retail shop when you play virtual games when you play online. The physical feel you have when you walk into the betting shops is quite different. Also, you don’t have your virtual games displayed the same appealing way online,” said Olawale.

According to Olawale, the sports betting sector contributed 3.2 per cent to the national gross domestic product (GDP) in 2023 and projects that it will reach 4.2 per cent in 2024. He noted that to maintain the growth trajectory, the sector must attract investments to spur growth. The first panel session of the conference’s third day addresses the issue of attracting foreign investments.

Tagged ‘Strategies for Attracting iGaming Investments to West Africa’, Country Manager of Melbet, Alexander Ezekiel and Global Business Development Manager of Mancala Gaming, Momo Alhassan, shared their perspectives on how localisation of gaming products and a unified regulatory system that allows for seamless operation will help attract investments.

“Investors need to understand the local markets. They need to understand and find new ways to synergize whatever product they are bringing from the foreign market into this space,” Ezekiel stated on the need to create USPs familiar to punters to attract and retain customer base. “You have to be innovative and flexible because there are a whole lot of opportunities that come into this space.”

On the other hand, Alhassan emphasised the importance of innovatively localizing gaming products to attain and maintain growth, pointing out that “there hasn’t been much cooperation in restructuring or developing games that are accustomed to our setup as Africans. These local games can be made into small games easily. It is just about rewriting the concept the winning lines, creating a multiplier for it, and calculating the algorithm and mechanics.

“If you see how much games providers are taking out of Africa, out of West Africa… but it is just because they are bringing the products based on their setup, and then we are playing it,” Alhassan explained. “We need to localize it, but we don’t have a single game studio so far in West Africa. Not until we begin to create games based on our customs and setups we cannot change the narrative.”

The current battle over jurisdiction between the state and national regulatory bodies leaves the operator bearing the brunt. Ezekiel said it was not attractive to investors to pay national and state licensing fees and other minor taxes on the local government levels. He suggested unifying the process in a manner that ensures seamlessness.

Alhassan further explained that unified systems, as evidenced by the Malta Gaming Authority and other bespoke licences that offer limited operating capabilities, are the way to go, adding that in Europe, the biggest licence “you can get is the MGA. MGA is what is accepted as the biggest licence in the gaming sector. What can we take from that? We have to make the process seamless. The gaming authorities can change the narrative, take control.”

“In Europe, the biggest license you can get is the MGA. MGA is what is accepted as the biggest licence in the gaming sector. What can we take from that? We have to make the process seamless,” Alhassan explained further. “The gaming authorities can change the narrative, take control, and create something similar where they will be issuing licenses, but definitely, they should fuse it to the national licence, where they take the licensing from Lagos and fuse it to the national licence. In Europe, jurisdiction matters what licence you need.”

In another panel session, the Country Manager of Kaizen Gaming, Oyindamola Micheals, argued that investors were primarily concerned with making quick profits as soon as they began operation without properly strategising how to gain customer brand loyalty. In his analysis, he encouraged them to study and adopt principles applied by existing operators while leaving room for innovation that would allow them to break the mould.

In the final session, where ideas were exchanged on how to grow punters’ participation in poker games, Principal Partner of Law Allianz, Yahaya Maikori, reiterated the need to ‘sportify’ the game. That way, he believes that the stigma surrounding poker, based on how it has been portrayed in popular culture, will help increase interest and participation and may lead to inspiring players to toe the professional path.

In the face of challenges and opportunities, the sports betting sector in West Africa stands at a crossroads. The insights shared at SBWA shed light on the path forward. The industry can transform itself by leveraging the power of local content, embracing innovative approaches to game development, and harmonising regulatory frameworks.

As the region’s population continues to grow, the gaming market holds immense potential. With collaboration between regulators, operators, and stakeholders, West Africa’s sports betting sector can evolve into a thriving ecosystem that contributes significantly to GDP and provides a safe and enjoyable experience for punters while attracting the much-needed investments for sustained growth.